The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: 3.75 Mountain Racing Bikes points Total Dirt Bikes Bikes Sales $ 922, 000 $ 262, 000 $ 404,000 $ 256,000 Variable manufacturing and selling expenses 481, 000 118 , 000 206, 000 157, 000 Contribution margin 441, 000 144, 000 198 , 000 99, 000 Fixed expenses: eBook Advertising, traceable 69, 800 8 , 700 40, 700 20 , 400 Depreciation of special equipment 44, 100 20 , 600 7, 700 15 , 800 Salaries of product-line managers 114, 200 40 , 600 38 , 600 35 , 000 Allocated common fixed expenses* 184, 400 52 , 400 80 , 800 51, 200 Hint Total fixed expenses 412, 500 122, 300 167 , 800 122, 400 Net operating income (loss) $ 28,500 $ 21, 700 $ 30, 200 $ (23, 400) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONo